The Brief:
Anthropic’s general counsel says AI will end the billable hour, forcing law firms toward value-based pricing.
But new research shows AI will intensify legal work, not eliminate it.
The billable hour is soon to be dead, according to Anthropic’s top lawyer.
Speaking at the American Bar Association's event, general counsel Jeff Bleich thinks AI will eliminate the tedious, time-heavy work that has long made law firms wealthy. And when that work disappears, billing by the hour no longer makes sense.
The interests of firms are at odds with the interests of their clients. Clients want problems solved fast. Firms get paid more when they don’t.
The billable hour has long been the gold standard in law. With AI, clients are demanding change from the status quo.
“The value is no longer you putting in time. The value is your strategy, your results.” Liberty Mutual’s top lawyer Damon Hart said as a panellist at the same event. Even IBM's general counsel, Anne Robinson, says she’s open to working with firms on creative billing alternatives.
Anthropic's own data paints the picture. AI is currently handling around 15% of legal tasks — but the company estimates that figure could reach 88%.
It's a tight thesis on paper. AI automates the grunt work, firms can no longer justify padding hours, and the profession pivots to value-based pricing.
Except the evidence tells a different story.
Research from UC-Berkeley tracked AI adoption over 8 months at a 200-person tech company. The finding was blunt: AI isn't reducing work. It's creating more of it.
Workers moved faster but took on broader responsibilities. They pushed into evenings and weekends without being asked.
The same dynamic plays out in law. Lawyers are using AI to tackle more work, typically reserved for seniors. Paralegals are drafting documents that were previously assigned to junior lawyers. Sole practitioners are taking on matters outside their core expertise because AI makes it feel manageable.
And what about the legal work coming out of AI?
For a technology widely predicted to hollow out the profession, AI is so far generating a remarkable amount of legal work.
The novel financing structures powering AI’s biggest investments require reams of paperwork. Anthropic is even keeping lawyers busy suing the US government after being declared a supply-chain risk.
Bleich may be right that the billing model has to change. The work, for now, isn’t going anywhere.
Source: Business Insider, Thomson Reuters